, , , ,

BTU 456: The CEO of Franchise Business Review talks about Vets in Franchises (Eric Stites)

, , , ,

"Owning a business is probably the hardest thing you’ll ever do. Hopefully, if you follow the franchise system and put in the hard work, it gets easier over time. And ultimately, you’re building equity in something that is eventually going to be worth something. Which certainly you don’t get being part of the military.”- Eric Stites

Subscribe on: iTunes | Stitcher | Google Play            Enjoy the episode? Review us on iTunes!

Why to Listen | Sponsors | Selected Resources | Transcript & Time Stamps | Comments

Eric Stites is the CEO of Franchise Business Review, a national franchise information firm that identifies the top franchise opportunities in the marketplace today, based exclusively on ratings and reviews from franchisees – the real franchise experts. Eric served in the Navy as a First Class Petty Officer, was the founder & President of Yaz.com, and was the Director of Corporate Development at Franchise Solutions. In his capacity of CEO of Franchise Business Review, he also has served on the VetFran committee to help veterans interested in franchises.

Why to Listen: (1) Franchises - we continue our deep dive into a career as a franchise owner - why this may be appealing to veterans and how to succeed at it. (2) Honesty about skill set - Eric talks about how vital it is - in franchising and in any career - to be exceptionally honest and reflective about your strengths and weaknesses. (3) Long-term investment - Eric talks about viewing a franchise investment as a 5-15 commitment (which, coin end tally is a great asset of veterans who often have approached the military as a long-term commitment). He talks about doing your homework - especially around culture, and making sure the business won’t be uprooted by technology in the long-term (4) Market Research - Eric’s career has been in market research and he provides some insight into what this sort of career is like.

Selected Resources: 

Transcript & Time Stamps: 

(0:55)

I have four reasons to listen to today’s episode. First of all, franchises. I continue the deep dive we’ve been doing into what it’s like to own a franchise and why this might be appealing to veterans. Eric is the CEO of the Franchise Business Review. He also serves on a VetFran committee focused on veteran franchise owners. He has a wealth of knowledge on this topic.

(1:17)

For those of you who are not interested in franchising, I’ve got three other reasons for you. First of all, honesty in your career selection. Eric talks about how vital it is any career to be honest and reflective about your individual strengths and weaknesses as well as the cultural fit of whatever organization you join.

(1:43)

Third, we talk about long term investment. It started off by Eric talking about franchising as a 5-15 year investment. Most veterans approach the military as a long-term time investment so franchising can be a great fit in this way. He also talks about doing your homework and not just figuring out the right cultural fit but also considering whether that industry is going to be impacted or uprooted by technology.

(2:30)

Lastly, we talk about market research as an industry - that’s Eric’s career. He talks about what it’s like to be in the industry of market research. This is a very resource heavy episode so if you have the chance, go to www.beyondtheuniform.io and check out the show notes where I’ll have all the resources posted.

(3:03)

If you haven’t signed up for our newsletter, you can do so at www.beyondtheuniform.io. The newsletter goes out every two weeks with resources and information. Also stick around after the episode for a little bit of a debrief. I’m going to cover my takeaways from the episode and I also welcome your thoughts in the comment section of the show notes. And with that, let’s dive in to my conversation with Eric Stites.

(3:29)

Joining me today from Portsmouth, VA is Eric Stites. I wanted to give special thanks to John Francis fromEpisode #129who was kind enough to introduce me to Eric. We’re going to be talking about franchises a lot so if you haven’t gotten a chance to check out my interview with John Francis, I definitely recommend it. As well as Episode #132 with Marlon Terrell who is a Navy veteran that opened a Chick-Fil-A franchise. Between the three of these interviews, it should give you a great view of what it takes to run a franchise. I also wanted to give a quick background on Eric. He is the CEO of the Franchise Business Review which is a national franchise information firm that identifies top franchise opportunities. Eric served in the Navy as a First Class Petty Officer. He is the founder and president of Yaz.com and was the Director of Corporate Development for Franchise Solutions. He has also served on the VetFran committee which is committed to helping veterans who have a desire to own a franchise.

(5:13)

How would you describe the work that you do with Franchise Business Review?

To put it simply, we’re the Consumer Reports of the franchise world. We reach out to thousands of franchisees every year and survey them on their satisfaction with the franchise they have invested in. There’s lots of different information about franchising out there and many other sources do franchise ranking. However, our ranking and reviews are exclusively based on franchisee reviews. We’re really the only ones in the franchise sector that do this to the level that we are doing it. One of the questions we ask on our survey is ‘Are you a veteran?’. This way we can also identify veteran franchisees. Some veterans transition into franchising owning straight out of the military but the vast majority are veterans that served years ago and transitioned out and worked in other industries for a number of years before moving into franchising.

(7:10)

Do you have a sense for what industry those veterans are working in prior to moving into franchising?

We get the sense that most people that get into franchising are in the middle of their careers. You do get some people coming out of college or coming directly from the military but the vast majority are 45-50 years old and have worked in corporate America for a while. And their previous experience really varies and that’s the great thing about franchising. You don’t necessarily need experience specific to the franchise that you want to work with. In fact, many franchises prefer that you don’t have a lot of experience before owning one of their franchises because they want to train and teach them in a specific way.  

(9:05)

That being said, it’s always helpful for a franchise owner to have at least a basic understanding of small businesses and finance. Those are skills you might pick up working in corporate American but you could also pick up those skills up by taking finance classes at the local community college. Te most successful franchisees have a strong grasp on finance.

(10:10)

Why do you think most franchise owners come to it at a later age?

It really varies all over the map. Certainly from an investment standpoint, someone a bit older is able to save up capital over a number years. However, there’s many franchise opportunities out there that require a much smaller amount of capital. The initial investment needed to start a franchise can range from $5,000 to several hundred thousand dollars. So for someone a bit older, hey might have saved up the nest egg needed to cover the initial investment of the franchise.

(11:40)

I think a lot of people don’t even consider franchising as an option because they think the initial investment is too great but I think when they start looking, they realize that there are a number of very affordable options out there. Buying a business is like buying a house. When you look at a frnchise, the total investment might be $150,000-$200,000 but a lot of that money is financeable. They might only need you to put down 25% of that as an initial investment. And for veterans, certain franchises have particular programs where they may discount that. So don’t be discouraged because there’s lots of great opportunities out there.

(13:35)

We have a couple companies on our list of great franchises for veterans. Those companies are CruiseOne and Cruise Planners. Obviously both are in the cruise planning and travel business. You can get into both of these franchises for less than $10,000.

(14:10)

I’m thinking back to Episode 132 with Marlon Terrell where he talked about visiting different franchises and talking to people working there to get a sense of how they liked it. It seems like the Franchise Business Review is doing that at scale. It sounds like an incredible resource.

I’m biased because I started the company 13 years ago but that was exactly the reason I started it. I had been in the franchise world for 7 years and I was working for a marketing company that helped market and recruit franchise owners. I had little sense of whether each franchise was actually a good company. I started doing research on my own and started seeing things that I didn’t like. High turnover, for example. Or an organization that would churn through a number of franchisees.

(16:10)

Anyone that wants to know what’s going on in a franchise system - all you need to do is pick up the phone or go visit a franchise location. The beauty of the franchise world is that at one time every franchisee owner was in your shoes. I tell people all the time, nobody ever buys anything today without reading peer reviews. Not that a franchise company might be a bad company, but understanding the experience of the franchisee can be extremely beneficial. I tell people that are interested in owning a franchise to understand the skillset that is required to succeed at a particular franchise they are interested in. We talked about CruiseOne and Cruise Planner. The skills that make those particular franchises successful is sales and marketing skills. If you’re not a good, strong salesman and you don’t want to talk to people all day about taking a cruise, that’s probably not the right fit for you.

(18:30)

A lot of people think of veterans generally as ‘good at service businesses’ or other things like that. But you can’t generalize. Every veteran has a different skill set. For some veterans a franchise like Snap-On tools, Sport Clips, and Budget Blinds might be a good fit. For other veterans, other franchises might be a better fit. It’s most important to understand what the skillset is needed to succeed in a franchise you’re interested in. It’s important to be honest with yourself, too.

(20:30)

Do you have any recommendations for veterans that might want to try sales, marketing, etc.without fully committing to it?

First of all, when buying a franchise, take your time. Talk to a lot of people that are franchise owners. Educate yourself. Do a deep assessment of your skillsets. Understand what the components of the franchise are and where you will fit.

(23:09)

or example, we have a number of tax related franchises. For some owners of this franchise, they love being out doing sales for the franchise while the accountants are back carrying out the franchise operations. For others, they prefer to be in the office managing the operations and hire a salesperson to go out and do the sales. So it’s important to understand the need of the business and how you will cover it.

(24:36)

In franchising, there’s some businesses that are sales driven but for many it’s lesser so. A lot of people go into franchising because it’s already a known brand. WIth these franchises, it’s not so much cold calling but rather customer service sales. But there’s other franchises that are product driven - the McDonald’s of the world.  People will come because they are already familiar with the product.

(26:40)

What is it about the businesses you mentioned that attracts so many veterans?

A lot of it comes down to culture. One of the things I always tell people who want to invest in a franchise is to understand the culture. Part of my job is to attend annual conventions held by various franchises. I might walk into one franchise convention and it’s like a high school reunion. And then I’ll walk into other conventions and it’s much more corporate feeling. It’s important to understand what kind of a culture you’re looking for. The biggest asset you have as a franchise is the other franchisees. You’re part of a network of people doing the exact same thing you’re doing. At any given moment you can call one of the other franchisees for advice. I think especially for veterans that’s the kind of environment they’re looking for.

(30:05)

Some franchises have few veterans in their system while others have a lot more. One franchise we work with is Signal 88. I think about 40% of their franchise owners are veterans. More commonly, most franchise companies follow the general population where it’s about 10% that are veterans. And if you’re looking at a franchise without a lot of other veteran franchisees it’s not necessarily a red flag. Just understand what that franchise community is like and whether or not it’s a good fit for you.

(31:25)

Owning a business is a tough job. I think a lot of people have a misconception that they want to own their own business so they have freedom in their schedule. But owning a business is the hardest thing you’ll ever do. Hopefully, if you follow the franchise system and put in the hard work, i gets easier over time. And ultimately, you’re building equity in something that is eventually going to be worth something. Which certainly you don’t get being part of the military. That’s an interesting thought of what the military would be like if it only offered equity. So it’s about that fit and that comfort with the franchise you’re investing in.

(32:27)

How can people utilize Franchise Business Review to research different franchises? And are there any other resources your recommend?

For a lot of veterans in franchising, the franchisor doesn’t even know that they were a veteran because they went into the corporate world after leaving the military and only ended up franchising years later. A lot of franchisors use Franchise Business Review to help them learn more about veteran franchise owners.

(34:05)

On our website you’ll find a link to an annual report that we do focused on veterans in franchising. You can download this report with the Top 100 franchise companies based on reports from veteran franchise owners. I’m also the Chairman of the VetFran Committee and what we do is help veterans get into franchising. We work with hundreds of different franchises to offer various incentives to veterans looking to get into franchising. That’s the most frustrating part of me serving on the VetFran Committee is that there are so many franchises out there that want to work with veterans but sometimes the toughest part is finding and identifying the veteran. When you’re first coming out of the military, it can be such a firehose of information and you don’t quite know where to turn.

(36:40)

Resources I recommend:

2017 Franchise Business Review veteran report

VetFran website

International Franchise Association website

Books

Franchising for Dummies

The Educated Franchisee

Organizations

Boots to Business

Also check out your local Small Business Association office. Talk to local bankers just to establish a banking relationship. Talk to services that provide help to veteran business owners. It can also be worth volunteering or working at a franchise location to learn about that franchise.

(41:40)

The one thing I would caution is that we all have those relatives that will try to discourage you from franchising. Listen to their story and their experience but often times people share stories and they’re kind of like urban legends. Make sure you’re more focused on talking to current franchise owners.

(42:40)

I love what you’re saying about being proactive and finding the resources that you need. If you can do this effectively, you can save yourself a lot of time and money.

This is a very proactive process and franchising as an industry is similar to the military. You will be given the training you need for certain situations. Each franchise has a process and I think that’s why veterans do so well in franchising. But especially before you invest in a franchise make sure you’re being proactive and going out and finding all the resources that you need to make a smart decision about what franchise you want to invest in.

(44:50)

Really take your time to find a company you’re excited about. You want something that is going to keep you interested for the long term. Being a franchise owner isn’t a get rich quick opportunity. You need to be in it for the long haul. Most people that are successful are in franchising for 5, 10, 15 years.

(45:45)

It’s also important to think about if your franchise is even going to be here in 10 years. Technology is changing so many industries. Something like haircuts is great because we’re always going to need haircuts but for other industries, technology has upended them overnight.

(46:15)

I love that idea of doing your research beforehand and making investment for the long term.

And this is another reason why franchises can be great for veterans. Military members know better than anybody about long term commitments. When I signed up for the military, I was 18 and the vision of what I thought I was getting myself into didn’t turn out to be the reality. Franchising can be similar in that the reality is often different than what you may have initially thought. So take your tie and do that research so you know as much as possible about what you’re getting yourself into.

(47:50)

You really need to think about that 10 year plan when you’re investing and creating strategies early on. At the end of the day what will the ultimate return on investment look like? Compare that to other investment possibilities. The difference with a franchise is that at the end of your investment term, you now have an asset you can sell. As opposed to being an employee where you wouldn’t ever build equity in your company.

(49:50)

What is your day-to-day like in the market research industry?

I had a strange career path. I was in the military and then went to college with a major in Plant Biology. After college, I went into photography and advertising. It took me 25 years before I stumbled into franchising and started doing research on a day-to-day basis. I never planned to be a researcher. But I was fascinated by small business and that’s what drew me into franchising. It was really intriguing to me. There’s so much to learn about franchising. It was like a drug for me, it’s a fascinating world.

(51:45)

Is there anything else that we haven’t covered that you would like to share?

I’ll just repeat myself by telling you to talk to as many people as you can out in the world before you invest in a franchise. Understand what they do on a day-to-day basis to be successful. Franchising is great but it’s alo hard work. Understand where your strengths are and what your goals are. Franchising might be a great option for you but maybe not. Keep digging. There’s so many resources out there that are trying to help veterans.

53:45

Thanks for your time Eric.

Post-Show Notes

(54:03)

One of the things that stood out to me as I reflect upon Eric’s advice is his suggestion to lean on other franchisees. These franchisees are a great resource and network for you. I think this is a great point about franchises and I think it can be translated into any other industry. I just read an article about an SDR (sales development representative). Typically this is the low man on the totem pole within a sales organization. This particular SDR created a YouTube page and started posting videos with advice and support for other SDRs. He has now built up a network of people around him. It makes me think of how important it is to establish a network wherever you go.

(55:55)

I liked that Eric mentioned that many franchises offer discounts for veteran franchisees. A takeaway for me on this note was to take your time thinking about what you want to do. Another thing you can do is save money so you don’t have to immediately find a job after leaving the military. You can wait until the right opportunity comes up and is something you will enjoy.

(56:31)

Also for veterans, make sure you make sure you get that discount if you are looking to go into franchising. I think this is true across the board that there are various resources and discounts available to veterans.

(57:05)

The last thing that I wanted to talk about is not falling for the hard sell. That some people within franchising may try to bully you into a deal you’re not excited about. I think this also applies to recruiters and many employment opportunities. A lot of people use that hard sell tactic because it works. You don’t want to end up in an organization where you felt pressured into joining. That’s all for this week. If you haven’t had a chance to leave us a review on iTunes. Have a great week and I’ll be back next week with another interview.